Werner Kapp

Technology group Altron will merge three of its IT businesses next year as it moves to simplify its operating model.

Altron Karabina, Altron Systems Integration and Altron Managed Solutions will be merged into a new entity called Altron Digital Business, to be led by former Dimension Data South Africa vice president of sales Craig Stewart.

Stewart had worked at Dimension Data – soon to be renamed NTT Data – for 10 years before moving to Altron in August. Collin Govender, who most recently led the Karabina and Systems Integration businesses, will take over as Altron group chief operating officer, a role in which he will be responsible for, among other things, group strategy execution, human capital management and corporate IT services.

Systems Integration, Managed Solutions and Karabina will formally be merged into a single legal entity with effect from 1 March 2024. The merger, called Project Unity, is being led by Stewart. Altron Digital Business will sit alongside Altron Security and form the group’s IT services division.

“Scale matters,” said Altron group CEO Werner Kapp in an interview with TechCentral. The three merged companies, he said, had largely the same customer base, although each offered different solutions into that base. Kapp said Stewart “really gets how to grow IT businesses at scale” and is therefore the best person to lead the merged business.

“We are very focused on simplifying the operating model. By March, we will have six companies in this simplified model,” Kapp said.

Altron is also on the prowl for acquisitions. Kapp said the group has a strong balance sheet with little debt, allowing it the flexibility to do deals.

Dividend

On Monday, Altron published its interim results for the six months to end-August 2023 in which it expanded its dividend payout ratio from a minimum of 40% of headline earnings from continuing operations on the back of improved cash flow. That helped give the share price a 6% fillip on Monday.

Revenue from continuing operations rose by 4% to R4.3-billion (11% excluding the ATM business). Continuing operating profit rose by a quarter to R362-million. Cash generated from continuing operations grew 27% to R530-million, while net debt to Ebitda (a form of operating profit) came in at a low 0.23x.

The underperforming Altron Nexus remains held for sale, as does Xerox agency Altron Systems Integration. Kapp said the group has received renewed interest in both of these businesses from potential suitors but declined to say more on this.

Read: The company buying up Altron shares

Netstar, meanwhile, had a cracking six months, adding 26% to its subscriber numbers on strong net customer additions. In fact, it achieved in the past six months more than 80% of the subscriber growth it generated in the entire 2023 financial year and surpassed the R1-billion revenue mark for the first time in a six-month period.  – © 2023 NewsCentral Media

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